The resident unemployment rate has crept up to a seven-year high for June periods, according to the 2017 advance labour force report released by the Ministry of Manpower (MOM) yesterday.
The overall unemployment rate this year, which has risen from 3 per cent in June 2016 to 3.1 per cent in June this year, mirrors the unemployment rate in 2007 and 2010.
The report that covers local labour market conditions particularly noted a decline in the employment rate for residents between the ages of 15 and 24. The Ministry claimed that this was due to the “higher propensity of youths to postpone entry into the labour force” since more choose to pursue further education.
This will continue to “exert downward pressure on the overall employment rate in the years ahead,” MOM asserted.
Meanwhile, the employment rate for residents between the ages of 25 to 64 has climbed from 80.3 per cent in June last year to 80.7 per cent in June this year.
MOM also claimed that the dip in the labour force participation rate (LFPR) for residents aged 15 and above from 68 per cent last year to 67.7 per cent this year did not adversely affect the number of discouraged workers here.
The report further revealed that the number of discouraged workers – that is, workers outside the labour force who do not believe they will be successful in finding a job – has in fact declined “from 9,900 in June 2016 to 9,500 in June 2017, and stayed low at 0.4 per cent of the resident labour force since June 2013.”
The long-term unemployment rate for PMETs (professionals, managers, executives and technicians) has also dipped from 0.9 per cent last year, to 0.7 per cent last year. MOM suggests that this could be attributed to more such workers choosing to re-skill or switch careers “with Government support through SkillsFuture and the Adapt & Grow initiative.”
Curiously, the report also revealed that despite the overall decline in employment, real median monthly income is climbing at a faster pace compared to 2016. This is due to an improvement in economic conditions, according to the Ministry.
MOM disclosed that the real income growth for the median and 20th percentile were significantly faster from June 2012 to June 2017, compared to the 5 years before this period. The nominal median monthly income (including employer CPF contributions) of full-time employed residents rose by 3.7 per cent post inflation, which is higher than 3.3 per cent in June 2017.
Despite this, the MOM has acknowledged that the local workforce growth is set to slow further. It added:
“For real income growth to be sustained, firms will have to continue to transform and grow to become more productive. In a manpower-lean environment, it is also important for firms to adopt progressive human capital practices.”
The full report is expected to be released on 26 Jan next year.